Category: Offices for rent

The outsourcing companies that are relocating their business to Sofia city are looking to rent more than 100 000 sq.m. of quality office premises. At the middle of the year that demand was for 70 000 sq.m but now it has increased. The companies from spheres such as IT, pharmacy, services that need to relocate as they are expanding their business, are in search of modern offices with all facilities needed, property maintenance service, and excellent location with easy access using the public transport, etc.

These companies are looking only for offices of the highest class A that answer all international standards and that have larger office premises that can reach up to 5000 sq.m. That is a brand new tendency as only a year ago the same companies were looking for offices of just 1400 sq.m max. This is a good sign as it speaks of the good place the economy is right now. At the same time, there is also an interest towards the offices closer to the city center and all the facilities there.

There is a serious increase in the demand for offices in Sofia and in fact approximately 50 % more office premises have been rented or purchased by the local and the outsourcing companies in the first nine months of the year compared to the entire twelve months of the last year. The main players on the office market in Sofia come from the IT, service and the outsourcing sectors and that demand for offices have led to a renewal of postponed projects for office buildings in Sofia with capacity of 66 000 sq.m.

Another aspect that the real estate agents are pointing out is the fact that the companies are looking for larger and larger office premises as they are hiring a growing number of employees. In other words, if in 2014 the companies were looking for office premises in Sofia of 1000 – 1400 sq.m, now there is a demand for 3000 – 5000 sq.m. The companies that are most active on the Sofia business centers market are the ones that are expanding their business and those that are now outsourcing their activities in Sofia.

All these companies are looking for offices of the highest class AA with excellent location, large office premises and easy access with the available public transport. The rental levels remain the same and they are in between 10 and 13 Euros/sq.m. for the offices of class A in Sofia.

The first nine months of the year marked a serious activity on the office market in Sofia. Many outsourcing companies opened offices and others relocated their offices in Sofia and their number is around 25 % higher compared to the same period last year. According to the real estate agents the key deals were signed with companies from the IT sector including Gameloft, IBM, Scale Focus and Apcom.

Due to the limited number of office premises in Sofia that are available, many projects for office buildings that have been postponed for years are now back in the game. This is valid for the City Tower projection Macedonia Square, for example, which once completed will offer 49 000 sq.m. The prognosis is for another 90 000 sq.m of office buildings of class A and B to be completed by the end of this year. Half of these office premises will be part of Capital Fort Business Center.

There is another tendency on Sofia office market that should be pointed out and that is the growing demand for offices in the center of Sofia. There is a serious interest towards the Millennium Center and the City Tower, which enjoy very central location with excellent transport connections and number of many facilities nearby.

The companies from the IT and the outsourcing industry, which are looking to rent or to buy office premises in Sofia, have specific needs which with they need to comply with. A great deal of the old office buildings in Sofia are not answering the needs of these modern companies. Yet, the new office projects in Sofia of the highest AA class do provide the right offices, location and facilities needed. The outsourcing companies which are already operating in Bulgaria require 5-7 sq.m on the average for each of their employees working in the call centers. This means a higher capacity of all systems in the office building including better ventilation, more powerful air-conditioning system, more toilets, more places for dining, and of course more parking lots.

The outsourcing companies are paying more attention now to the maintenance of the office, the expenses they have for heating and cooling of the office premises they are renting, the bills for internet, electricity, etc. The other parameters of the building are also of great importance for these companies and they include fast access to the public transport, pleasant working environment, etc. Usually the employees of these outsourcing companies are young people with dynamic life. That is why the offices in Sofia that the companies are looking for should be in communicative areas where they can have social contacts.

In 2015 only one office building in Sofia opened doors and that is the office project Capital Fort on Tsarigradsko Schousse Blvd. With the opening of the new business center, the capital Sofia will get 42 000 sq.m. of office premises to be used by the outsourcing companies. Currently under construction is also the second phase of the Infinity Tower Building next to Bulgaria Mall, placed on Bulgaria Blvd. This new office premise is to be completed in 2016. At the same time several other projects are to be completed. These projects are not new but they have been postponed until now, waiting for better time to come. Among them is the City Tower Building on Macedonia Square, which is to be completed in 2017. The same is valid for the Millennium Center close to the National Palace of Culture. This building will feature residential premises, trade zones and offices.

The real estate agents believe that the total area of the new office buildings in Sofia to be released on the market is 72 000 sq.m, which is the amount of office premises that is being rented by the outsourcing companies for a period of 6 months approximately. This means that there is a serious demand for the construction of many other such office projects in Sofia. Currently, the rental levels of the Sofia office premises are stable and the offices are being rented for 10-13 Euro/sq.m, with no increase planned for in the next two years. Besides the rent however, the companies that are renting offices in Sofia also need to cover various maintenance taxes and other expenses.

In the last few years the profile of the companies that are active on Sofia office market has changed. Currently, the companies that show interest to outsource part of their business and even the entire business are mainly IT companies and companies from the outsourcing industry, and currently – the companies for easy loans which need not only front offices but also large back office premises. These companies now have higher and higher requirements for the office premise in Sofia they want to rent or to buy. The requirements of these companies are associated with the improved quality of the construction, with better infrastructure and onsite services offered. These companies are also looking for better property management.

In addition to all those criteria, that the Sofia office building needs to cover, it further needs to have pleasant façade and to be placed in an area with good infrastructure with excellent transport connections. With all that in mind, it should be noted that the number of the available office premises in Sofia and in the other large cities in the country are not many in number. It is expected their number to go down further by the end of the year. That is so, as the demand for new office buildings is serious, while the existing business buildings in Sofia are already 80 to 90 % full.

The real estate investors are looking for clear requirements concerning the in office buildings in Sofia. At the same time the companies that are looking to outsource their business to the capital of Bulgaria or to relocate their office in Sofia to a bigger one are paying greater attention to the facility management and the technical standards. There is a great interest towards the office projects in Sofia that are certified according to the international standards like BREEAM, LEED, etc.

Currently in the city of Sofia the side that is setting the rules is the one of the tenants. The companies that are looking for office premises in Sofia show interest in high quality office buildings which are energy-efficient built with modern materials and according to the latest technologies. The requirements are becoming more and more and that means better working environment for the employees.

Besides being efficient, the modern offices in Sofia should also have a good structure that allows for the premises to be rented by different companies working in various spheres. The companies that are interested in these offices of class AA in Sofia are mainly companies from the IT and the outsourcing sphere, which are mobile and open to changes. These companies are also interested in the way the office building looks like, in the design and the façade of the building. The organization of the common area is also of great importance.

The intensive increase in the outsourcing industry in Bulgaria has led to a great interest in the office premises in Sofia. The main demand is for offices of class A, located close to “Tsarigradsko Schousse” Blvd. and the Sofia Airport, the Business Center Sofia and “Bulgaria” Blvd. The available office premises of class A in Sofia for 2014 have decreased in half compared to the year before that. The serious demand for offices and the lack of many projects for business centers have led to that situation.

The main companies that are active on the market of offices are coming from the outsourcing sphere. Almost all of them expect increase in their income for 2015 and around 60 % plan to increase the number of their staff with 100 to 200 new employees. Approximately 40 % of the companies are planning to change their office and move to a larger one. The main factors for choosing a new office premise in Sofia are the location, the expenses, and the availability of parking area. There is strong interest towards several new office projects in Sofia, namely – Capital Fort, Kambanite Business Center, Sofia Airport Center.

The recovery of the Sofia office market in 2014 and in the first half of 2015 is easy to see. The percentage of the rented office premises in Sofia in 2014 has gone up with 42% compared to the year before that. This means that in 2014 the number of the rented offices has been around 154 000 sq.m. At the same time the percentage of the available offices in Sofia city has dropped to 26% in 2014. The main interest is towards the Sofia offices of class A, which are in the focus of attention of the outsourcing and IT companies, which are looking to relocate their business to Bulgaria. The average rental levels are around 10 and 13 Euro/sq.m. with a tendency to go up.

At the same time the office market in Sofia is coming with new projects for business centers including Capital Fort Business Center, the office center next to Bulgaria Mall, Trade Center Europe, Sofia Airport Center, etc. The interest of the outsourcing companies is provoked by the offices of class A, the young professionals in the country with knowledge of foreign languages, etc.

Several major projects for business centers are in the focus of attention in Sofia city and their development is strictly followed by the real estate agents. Which are these projects and what is to be expected?

Capital Fort – the business center is almost ready, expecting to get certificate for habitation soon. It is believed to be the tallest building in Sofia with 126 m of height and 42 000 sq.m of office premises. Capital Fort is among the significant office buildings in the capital, with elegant architecture and strategic location on Tsarigradsko Schousse Blvd. The new business center in Sofia will have offices of class A, trade area, underground parking zone with 670 parking lots, etc. The building will be certificated according to the criteria for green buildings BREEAM.

City Tower – located in the heart of the capital on Macedonia Square, this business center will offer 55 sq.m of office premises and trade areas, as well as six underground parking levels in Sofia. The business center will be constructed using the top down method. And is expected to be ready in a period of two years.

San Stefano Plaza – the construction of the multifunctional complex goes fast. The new project will feature 56 000 sq.m of area including offices and residential units, shops, sports center and huge underground parking zone. In the eastern part of San Stefano Plaza will be located a small office building.

Sofia Airport Center – the start of the second phase of the complex will be by the end of 2015. The new office building will offer 25 000 sq.m of area and is expected to be certified according to the LEED Platinum standards.

Trade Center Europe Building 1 – that is the last of 15 buildings located near the airport. It has 156 800 sq.m. of area including offices and storage zones, shops, two-level restaurant and a multifunctional sports hall. The office building will be certified by the ecological system BREEAM.

Millennium Center – located near the National Palace of Culture and expected to be ready in two years. It will feature a large trade center on five levels, a five-star hotel, SPA center, restaurants, and level a helicopter platform. There will be an office building as well with 24 floors and a third building occupied by luxury apartments.

Expo 2000 Office Park – new office building with LEED Platinum and DGNB Gold certificates. It features one 8-storey building and one 3-story building and many facilities.